Ukraine Latest: Zelenskiy Hints at Advances in Kherson Region

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Ukraine’s president hinted at progress in the Kherson-region counteroffensive after at least the third meeting in the past eight days with top military commanders. “Ukrainian flags are returning to the places where they should be,” Volodymyr Zelenskiy said.

Europe is bracing for another spike in energy costs and potential rationing after Russia’s Gazprom PJSC didn’t reopen the key Nord Stream 1 gas pipeline as planned on Saturday, citing a newly discovered fault. The EU said Gazprom was acting on “fallacious pretenses.” The European Union is considering unorthodox options to counter energy price spikes.

Germany announced a $65 billion cost-of-living support package. Sweden and Finland took action to stabilize power markets. And tens of thousands of Czechs protested on Saturday, demanding help with rising energy bills, and petitions circulated calling for a direct contract with Russia for cheap gas supplies.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • EU to Discuss Radical Energy Interventions as Crisis Worsens

  • Germany May Make ‘Billions’ Off Energy Profit Levy, Scholz Says

  • Europe Looks Set for Energy Rationing After Russian Gas Cut

  • Tens of Thousands Protest in Prague Demanding Aid With Energy Bills

  • Nordic Utilities Get $33 Billion Backstops as Power Markets Fray

On the Ground

Russian shelling of port town of Ochakiv in the southern Mykolaiv region destroyed an elevator with several thousand tons of grain, deputy mayor Oleksiy Vaskov said. The shelling also destroyed several houses, he said. Russia continues to focus on establishing control over the territory of the Donetsk region, holding the captured areas of the Kherson, Kharkiv, Zaporizhzhia and Mykolaiv regions, Ukraine’s defense ministry said. It said Russian troops launched more than 10 missiles and more than 24 air strikes on military and civilian targets in Ukraine in the past day. Russia’s defense ministry said Sunday it had destroyed a Ukrainian command unit in the Kharkiv region.

(All times CET)

Putin to Host Sanctioned Myanmar Leader at Forum (9:20 p.m.)

President Vladimir Putin will host Myanmar junta head Min Aung Hlaing, sanctioned by the US for alleged human rights violations, at an economic conference in Vladivostok this week, as the Russian leader seeks to show US efforts to isolate him aren’t working.

The Myanmar leader will speak on Wednesday alongside Putin and Li Zhanshu, China’s top legislator, and the prime ministers of Mongolia and Armenia, according to a program of the Eastern Economic Forum posted online over the weekend. The leaders of India, Malaysia and Vietnam will speak by video address.

The US imposed sanctions on Myanmar’s military leaders after they took power in a coup in February 2021. Min Aung Hlaing had been sanctioned two years earlier for alleged human rights abuses by the forces he commanded.

EU to Debate Radical Energy Intervention Tools (8:10 p.m.)

European Union governments are considering unorthodox measures to rein in soaring power and gas prices, including gas-price caps and a temporary suspension of power derivatives trading.

The Czech Republic, which holds of the EU presidency through December, is set to include those tools on a list of potential emergency intervention options, according to a draft document seen by Bloomberg News. The document will be a starting point for discussions when energy ministers gather on Friday for an extraordinary meeting to address spiking electricity prices and Russia’s moves to limit natural gas supplies to Europe.

Zelenskiy Hints at Advance After Meeting Commanders (6:30 p.m.)

Volodymyr Zelenskiy met with his top military commanders on Sunday for at least the third time in eight days to discuss the situation on the front line, saying afterward that “Ukrainian flags are returning to the places where they should be by right.”

The comment appeared to refer to an image that circulated widely on social media Sunday of Ukrainian troops raising their nation’s flag on what was said to be a hospital in Vysokopillya, west of the Dnipro River in Kherson oblast.

Ukrainian forces are trying to advance in the Kherson region, which Russia occupied shortly after the start of their invasion. There were unconfirmed reports on Sunday that Kyiv’s troops had recaptured Vysokopillya.

Finland, Sweden Seek to Stabilize Power Markets (5:20 p.m.)

Sweden’s government will provide Nordic and Baltic utilities as much as $23.2 billion in credit guarantees as it seeks to prevent Russia’s energy curbs from setting off a financial crisis, it said Sunday.

Separately, Finland will set up a 10 billion-euro ($10 billion) emergency backstop to help utilities weighed by surging collateral demands as they trade on volatile power markets.

The moves are just the latest knock-on effects from Russia’s war in Ukraine and its choking off of gas supplies to Europe.

Kyiv to Boost Electricity Exports to Romania, Slovakia (5:09 p.m.)

ENTSO-E, the European grid operators network, agreed to allow Ukraine to increase electricity exports to the EU by a fifth during daytime hours, state-run Ukrenergo said Sunday on its website.

Ukraine will ship 300 megawatts from 7 a.m. to 11 p.m. CET Monday through Friday and from 9 a.m. to 11 p.m. on weekends, Ukrenergo said. The country’s electricity exports are to remain at 250 megawatts in overnight hours.

The increase will start Monday with Ukraine shipping 125 megawatts toward Romania and 175 megawatts to Slovakia.

US Ambassador to Moscow Departs (4:33 p.m.)

John Sullivan, the US ambassador to Russia, ended his tenure after almost three years and departed the country, the US embassy in Moscow said on its website.

The nomination of a new ambassador by President Joe Biden will be subject to approval by the US Senate. It comes as tensions between Moscow and Washington are running high after Russia’s invasion of Ukraine.

Ukraine Says Black Sea Grain Shipments Reach 2 Million Tons (2 p.m.)

Grain shipments from three Ukrainian Black Sea ports continue under a safe-transit deal reached in July with the help of the UN and Turkey, which runs a joint coordination center for the cargoes in Istanbul.

Another dozen ships loaded with grain left Ukrainian ports Sunday morning, Turkey’s defense ministry said on Twitter. Oleksandr Kubrakov, Ukraine’s infrastructure minister, put the flotilla at 13 ships carrying a total of 282,500 tons to eight countries.

So far the Black Sea initiative has moved 2 million tons, Kubrakov said. Shipments from Ukraine have helped alleviate global shortages and driven a sharp drop in grain prices.

Zelenskiy Speaks With Von der Leyen (1:30 p.m.)

Ukraine’s president spoke by phone Sunday with European Commission President Ursula von der Leyen, he said on Twitter.

Among the topics were the next tranche of European aide to Ukraine, which is expected to be offered this week, and potential further sanctions on Russia.

Scholz Blames Putin for Germany’s Gas Squeeze (12:16 p.m.)

Germany’s leader put the responsibility on Russian President Vladimir Putin as the government in Berlin announced a new support package to help citizens cope with spiraling energy costs.

“Putin’s Russia has broken its contracts,” said Chancellor Olaf Scholz. “This is part of the new reality...Russia is no longer a reliable supplier.”

Scholz nonetheless assured Germans that the nation would have enough gas to get through the winter, even though Russian supplies from the Nord Stream 1 pipeline have been suspended indefinitely. Germany’s energy regulator said Sunday that storage levels are already at 85%.

Ukraine Expects 5 Billion Euros in EU Aid This Week, PM Says (12:03 p.m.)

Ukraine expects to get 5 billion euros ($5 billion) in European Union assistance this week, Prime Minister Denys Shmyhal said after meeting with German President Frank-Walter Steinmeier in Berlin. Schmyal also said Germany will provide 200 million euros to support some of the millions of people displaced within Ukraine.

“We are grateful to Germany and all countries of the European Union for financial assistance,” Shmyhal said in an emailed statement. The funds will be used to “ensure our economy’s resilience, army support and going through heating season,” he said.

Ukraine also hopes to get more heavy weaponry from Germany, and expects to receive a “super modern” Germany-made air defense system IRIS-T this fall, he said.

Germany Seals $65 Billion in Cost-of-Living Aid (11:20 a.m.)

German’s coalition government agreed on a relief plan worth about 65 billion euros ($65 billion) to help millions of households struggling with soaring prices as Russia once again cut off gas supplies via the Nord Stream 1 pipeline.

“The rapid and appropriate relief for citizens and the economy is necessary due to the sharply increasing burden of high energy prices,” the government said.

Energy Rationing Now Looking Likely in Europe (8:56 a.m.)

Energy rationing in Europe this winter is looking all but inevitable after Russia’s Gazprom made a last-minute decision not to turn the crucial Nord Stream pipeline back on after maintenance.

The European Union has already created a voluntary 15% demand reduction target for gas, with the option of making it obligatory if needed. The bloc’s energy ministers plan an emergency meeting on Friday to decide on next steps.

Europe Looks Set for Energy Rationing After Russian Gas Cut

Russia Looks to Sow ‘Political Chaos’ Across Europe, Zelenskiy Says (8:30 a.m.)

The eleventh-hour move by Russia’s Gazprom to keep the Nord Stream 1 gas pipeline closed is part of “a decisive energy attack on all European,” Ukraine’s president said.

In his nightly video address on Saturday, Volodymyr Zelenskiy said Russia “wants to weaken and intimidate the entire Europe, every state.” President Vladimir Putin’s government “is trying to attack with poverty and political chaos where it cannot yet attack with missiles,” Zelenskiy said.

His comments came hours after tens of thousands of Czechs took to the streets in protests tied to high energy costs and a cost of living squeeze.

IAEA Plans Report on Ukraine Nuclear Situation (8 a.m.)

The head of the UN’s atomic agency said he plans to publish a report within days on “the situation with physical, nuclear security and guarantees” across Ukraine.

A team from the International Atomic Energy Agency led by director general Rafael Mariano Grossi visited the Zaporizhzhia plant on Thursday. Grossi called the ability to establish a permanent presence of IAEA monitors at the plant “a game changer.”

Separately, the mayor of Enerhodar, the town nearest the atomic plant, said Russian troops were impeding the delivery of humanitarian aid for citizens including medication, baby formula. and material to repair windows shattered by shelling.

Russia Failing to Properly Equip, Pay Its Troops, UK Says (7:30 a.m.)

Russian forces in Ukraine are likely to be suffering from morale and discipline issues as the invasion grinds toward its seven-month mark, the UK defense ministry said.

“One of the main grievances from deployed Russian soldiers probably continues to be problems with their pay,” the UK said, offering no direct evidence for a claim that “sizable combat bonuses” aren’t being paid.

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